The Securities Commission granted an exemption from the prospectus requirement to an Australian company, BHP Group Limited, for the distribution of shares in another Australian entity, Woodside Petroleum Ltd., to its Canadian shareholders as a dividend in specie. This decision was made because the distribution did not meet existing legislative exemptions, as Woodside is not a reporting issuer in Canada. The exemption was based on the fact that the company has a minimal presence in Canada, with Canadian shareholders holding a de minimis proportion of shares, and that no investment decision is required from these shareholders to receive the distribution.
The key regulations involved are section 53 of the Securities Act (Ontario), which generally requires a prospectus for distributions of securities, and section 74(1), which allows for exemptions. The decision also references National Instrument 45-106 Prospectus Exemptions and National Instrument 45-102 Resale of Securities, which provide conditions for exempt distributions and resales.
The outcome allows the Australian company to proceed with the share distribution in Canada without a prospectus, under the condition that any first trade of the distributed shares in Canada will be considered a distribution and subject to certain resale provisions. The decision was made on February 18, 2022, by the Ontario Securities Commission, which acted as the principal regulator.